Consumer credit growth remains muted amid Brexit uncertainty

CONSUMER credit growth decelerated to its slowest pace in more than five years in September, as continued Brexit uncertainty keeps individuals cautious about spending.

Bank of England figures, released on Tuesday, revealed that the growth rate in unsecured consumer lending slowed to six per cent in the 12 months to September, the smallest increase since July 2014.

This is down from 6.1 per cent in August this year.

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The extra amount borrowed by consumers in order to buy goods and services fell to £800m in September, and for the second month in a row was below £1.1bn, the average since July 2018.

Conversely, mortgage lending remained stable, with net mortgage borrowing by households broadly flat at £3.8bn in September, close to the average of the past three years.

The stability in the monthly flows has left the annual growth rate unchanged at 3.2 per cent, the Bank said.

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“Although September did not see any major leaps or bounds in terms of mortgage lending, market activity remained steady,” said Vikki Jefferies, proposition director at mortgage network PRIMIS.

“Lenders continue to offer attractive deals and advisers remain on hand to provide clients with the support they’re looking for. As a result, consumer confidence in the mortgage market is still strong – no mean feat considering the wider economic turbulence.”

Read more: P2PFN’s special report on property lending